In today’s briefing:
- [Sea Limited (SE US, SELL, TP US$62) Earnings Preview]: Increase Spending in ECommerce and Gaming
[Sea Limited (SE US, SELL, TP US$62) Earnings Preview]: Increase Spending in ECommerce and Gaming
- We expect that Shopee is spending more in recent months to defend from TikTok Ecommerce’s growth;
- Further, we see increased marketing to maintain <FreeFire’s> user base, especially in Indonesia; We suggest that SEA’s strong margin performance in 4Q22 was temporary.
- We forecast that 1Q23’s net margin is 11.2% vs. 4Q22’s 17.9%. We maintain our SELL rating and US$ 62 TP, implying 27x FY23 P/E.
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